Under the new rule all
indexes containing JGBs will exclude privately placed
bonds. That would result in a decrease of the JGB weighting
from the current 18.4% to 15.3%, according to the
investment bank.

Recent months have seen an
increase in the weightings of JGBs in indices, prompting
foreign portfolio managers to invest in Japan?s sovereign
bonds, despite low yields, in a bid to keep up with the
benchmark.

In addition, liquidity
constraints for JGBs in the Asian Pacific Aggregate Index
are expected to increase from ¥20 billion to ¥35 billion.
This change however, will not affect the Global Aggregate
Index, which already has a ¥35 constraint.